Jones Lang LaSalle Office Outlook For San Francisco And The ValleyFebruary 5, 2009
The Jones Lang LaSalle outlook for office space in San Francisco:
Downsizing companies paired with sluggish tenant demand will cause downward pressure on rental rates to gain momentum in 2009. Rising vacancy rates, barring an unexpectedly rapid recovery, market fundamentals in 2009 will be downward trending as negative net absorption is expected.
Maturing debt, constrained lending and depreciated asset values will place a number of San Francisco building owners in jeopardy of default, forcing recapitalization or distressed sale transactions. This should present attractive opportunities for buyers with significant pools of equity financing.
And for Silicon Valley:
Although the outlook for the Silicon Valley is grim, the general consensus is that the market is well positioned to weather this downturn. During the tech wreck, the Silicon Valley lost over 231,000 jobs or nearly 21 percent of its workforce. Preliminary estimates have the valley shedding up to 26,000 positions in 2009.
∙ North America Office Report – Q4 2008 (pdf) [joneslanglasalle.com]
∙ Pro Forma Problems: Find Commercial, Replace With Residential? [SocketSite]
Comments from Plugged-In Readers
Sorry to be off topic, but I just rented an unit from the Odeon, does anyone know if such buildings are rent controlled? They were built before 1979 but were converted to condos afterwards. Thanks!
Hard to say based only on that info. Just ask your LL.
If it is a condo then it is almost certainly not covered by rent control (exception is if it is still owned by the same person that converted it to a condo — although tipster disagrees with me on that point). But does it matter? Rents aren’t going up any time soon whether it is rent controlled or not.
The Answer is yes and no. Rental increases that are tied to rent controlled ordinance are not applied to Condominiums or Single Family Residences, with the exception of leases that commenced prior to 1996, per Costa-Hawkins.
The other bundle of gixmos that go with rent control do apply.
See an Attorney or check with the Rent Board for more details.
No, I agree with you, Trip. The converter to condos doesn’t get to end rent control. And the existing tenant gets a 1 year lease (lifetime if elderly or very disabled) and so even if the unit is sold, the lease will control.
Back on topic, I rent commercial space in Silicon Valley. It’s dead. No one is even looking. Everyone is laying off and you just call up your existing landlord and tell him that either he drops your rent or you’re gone at the end of the lease, so people aren’t even moving to smaller space when they lay off. The landlords are terrified right now and will cut your rent in half before the lease ends if you’ll extend, just to keep what’s left of your business there.
this looks like interesting info, except that I don’t know how to read it.
happy birthday hipster!
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